<ul><li><span style="font-family:Arial, Helvetica, sans-serif;font-size:medium;">MCB reported 2Q20 earnings of PKR7,871mn (EPS: PKR6.64),
15.7% higher Y-o-Y and 14% above our estimate. While revenue fell 8% Y-o-Y,
earnings were cushioned by provisioning cost reversals. The bank announced a
second interim cash div. of PKR5.0/share. We adjust our estimate to incorporate
lower credit costs for 2021 in light of the recent results; this is partially
offset by a higher tax rate linked to the bank’s loans-to-deposit ratio.
Favourable interest rate positioning, solid asset quality metrics, positive
loan growth outlook and high div. yield underpin our preference for the stock.
MCB is one of the three Pakistan stocks in the MSCI EM Index. Pakistan’s
downgrade to FM (decision on Sep 7) could lead to significant outflows, which
...
